352 Chapter 10 C. When material is purchased. d. When purchase order is originated. 15. An unfavorable price variance occurs because of a. price increases on raw materials. b. price decreases on raw materials. C. d. less than anticipated levels of waste in the manufacturing process. more than anticipated levels of waste in the manufacturing process. 16. Which department is customarily held responsible for an unfavorable materials usage variance? 17. a. b. Quality control. Purchasing. C. d. Engineering. Production. The standard unit cost is used in the calculation of which of the following variance? a. b. C. d. Materials price variance No No Yes Yes The formula for labor rate variance is 18. a. b. C. Materials usage variance No Yes No Yes actual hours worked x actual hourly rate less standard hourly rate. actual hours worked x standard hourly rate less actual hourly rate. standard hourly rate x standard labor hours less actual hours worked. d. standard hourly rate x difference in hours. 19. Excess direct labor wages variance resulting from overtime premium will be disclosed in which type of variance? a. Yield. b. Quantity. C. Labor efficiency. d. Labor rate. Standard Costs and Operating Performance Measures 20. How is a labor rate variance computed? a. b. C. d. 353 The difference between standard and actual rate multiplied by standard hours. The difference between standard and actual rate multiplied by actual hours. The difference between standard and actual hours multiplied by actual hours. The difference between standard and actual hours multiplied by the difference between standard and actual rate. (AICPA Adapted) 21. Troopers Company had budgeted 50,000 units of output using 50,000 units of raw materials at a total material cost of P100,000. Actual output was 50.000 units of product requiring 45,000 units of raw materials at a cost of P2.10 per unit. The direct materials price variance and usage variance were a. b. C. d. Price P 4,500 unfavorable P 4,500 favorable P 5,000 unfavorable P10,000 favorable Usage P10,000 favorable P10,500 unfavorable P10,500 favorable P 4,500 unfavorable 22. Natt Company uses a standard cost system. Information for raw materials for Product E for the month of October is as follows: Standard unit price.... Actual purchase price per unit. Actual quantity purchased. Actual quantity used. P1.60 1.55 2,000 units 1,900 units Standard quantity allowed for actual production... 1,800 units What is the materials purchase price variance? a. P90 favorable. b. P90 unfavorable. C. P100 favorable. d. P100 unfavorable